Cal Water rates are approved to increase this month

OROVILLE &GT;&GT; If you're a customer of California Water Service, brace yourself for a bigger bill beginning Aug. 29.

The average Cal Water customer in Oroville will see their bills increase from about $52.16 a month to an average of about $60.55.

A Chico customer who uses an average of 20 units of water now pays about $33 a month. With the increase the bill would be $40.94, or 24 more cents per day.

Rates are approved for three years.

After this first increase, Chico rates will go up an additional 1 percent in 2015 and 2016. In Oroville, the additional rate increase will be 0.3 percent.

Cal Water, which is a publicly traded company with investors, is governed by the California Public Utility Commission (CPUC), which approves all rate increases. The rates are intentionally tied to operating and infrastructure costs. This way the company does not earn the bulk of its money based on water usage, which could discourage conservation, officials said.

The CPUC allows stockholders to earn 7.94 percent annually.

Cal Water filed for a rate increase about two years ago, and usually rates are approved after 18 months.

A delay occurred with the administrative law judge, and approval was eight months late. The CPUC has allowed the rate increase to be retroactive, therefore a surcharge will appear on people's bill, but not immediately, said Cal Water Chico's acting district manager Peter Bonacich. It's unclear yet whether the surcharge will be spread over one, two or three years.

Toni Ruggle, district manager for the Oroville district, said the Oroville branch of Cal Water has higher rates than Chico, and higher rates than some other Oroville water companies. Some of the reasons include the need for a water treatment plant.

Also, another Oroville water company can earn revenue from hydropower generation, whereas Cal Water Oroville cannot.